Professor of Marketing, Director of Research (Organisation Studies)

Philip Stern joined Exeter Business School in September 2013. He previously worked at Loughborough, Bangor and at Warwick Business School. He holds a visiting Professorship at the Ehrenberg-Bass Institute at the University of South Australia.

He has managed and contributed to numerous executive courses for companies including Unilever, TNT, Barclay’s, Diageo, Carlsberg, HSBC, and Severn-Trent.

His expertise and research has been sought by companies including Bristol Myers Squibb, GfK, Glaxo Smith Kline, Novartis, Lilly Industries, Napp Pharmaceuticals, Organon, Procter and Gamble, IMS, Premier Farnell, Atkins and the National Audit Office.

Before becoming an academic Philip worked in new product development for Unilever and spent time in Nigeria running a cosmetic factory. He also worked for Avon in European category management.

Philip’s research is focused on market segmentation, the pharmaceutical industry and the prescribing behaviour of general practitioners.

He has published many articles in journals including Management Science, Journal of the Academy of Marketing Science, International Journal of Research in Marketing, Industrial Marketing Management, Marketing Letters, Journal of Business Research, Journal of Advertising Research, Long Range Planning, British Journal of Management, Omega, Journal of Brand Management, Communications Law.

He is also co-author of “Marketing Management and Strategy”, http://tinyurl.com/35cxefs a leading text in the area and has contributed chapters to edited books.

Philip is interested in the realities of buying behaviour using real data to better understand the replicable patterns of consumption in a wide range of markets from fast moving consumer goods to pharmaceutical prescribing and from industrial contracting to charitable donation.

These realities often stand in contrast to the rhetoric frequently found in marketing literature: for example it transpires that pursuing customer loyalty is frequently quixotic rather than a strategy which makes economic sense.

Philip’s research leads directly to the development of empirical generalisations in the field of marketing and where possible generalisations which are simple and easy to use in practice.

Current research activity

Philip is currently undertaking a co-creation project funded by the Economic and Social Research Council between Exeter University Business School and the Crown Commercial Service which is an executive agency of the Cabinet Office responsible for providing commercial services to the public sector and improving government commercial and procurement activity. The Cabinet Office is a department of the Government of the United Kingdom. The aim of this ESRC project is to explore ways of helping to meet procurement targets for SMEs by 2020.

Philip is also collaborating with Professor Malcolm Wright at Massey University in New Zealand to identify the characteristics of innovative General Practitioners.

A third collaboration with Professor Wieringa of the Univerity of Groningen and Professor Nenycz-Thiel at the University of South Australia is examining patterns of cross-category purchase behaviour.

Abstract:Marketing Management and Strategy

Journal articles

Abstract:Forecasting Branded and Generic Pharmaceuticals

We forecast UK pharmaceutical time series before and after the time of patent expiry. This is a critical point in the respective lifecycle as a generic form of the product is introduced to the market, while the branded form is still available for prescription. Forecasting the number of dispensed units of branded and generic forms of pharmaceuticals is increasingly important due to their huge market value and the limited number of new ‘blockbuster’ branded drugs, as well as the imposed cost to national healthcare systems like the NHS. In this paper, eleven methods are used to forecast drug time series including Diffusion Models (Bass model & RPDM), ARIMA, Exponential smoothing (Simple and Holt), naive and regression methods. ARIMA and Holt produce accurate short term (annual) forecasts for branded and generic drugs respectively, while for the more strategic horizons of 2-5 year ahead, Naive with drift provides the most accurate forecasts.

Abstract:The Relationship Between Household Life Cycle and Brand Loyalty

This research investigates changes in brand loyalty as households pass from one stage of the household life cycle to another. Analysing 45 brands in three consumer product categories in the UK, we find that the changes follow a U shape pattern. Brand loyalty declines as households shift from the young single stage to the young couple and the young family stage, remains relatively lower through the older family stage, and then increases at the post family and older single stages.

It is increasingly recognized that progress can be made in the development of integrated theory for understanding, explaining and better predicting key aspects of buyer–seller relationships and industrial networks by drawing upon non-traditional research perspectives and domains. One such non-traditional research perspective is stochastic modeling which has shown that large scale regularities emerge from the individual interactions between idiosyncratic actors. When these macroscopic patterns repeat across a wide range of firms, industries and business types this commonality suggests directions for further research which we pursue through a differentiated replication of the Dirichlet stochastic model. We demonstrate predictable behavioral patterns of purchase and loyalty in two distinct industrial markets for components used in critical surgical procedures. This differentiated replication supports the argument for the use of stochastic modeling techniques in industrial marketing management, not only as a management tool but also as a lens to inform and focus research towards integrated theories of the evolution of market structure and network relationships.

McCabe J, Dacko S, Stern PP (2012). Before and after: using the Dirichlet to analyze the sales impact of a sustained increase in promotional activity in an organizational market. Journal of Advertising Research, 52(2), 214-224. DOI.

Abstract:Can branded drugs benefit from generic entry? the role of detailing and price in switching to non-bioequivalent molecules

Patent expiration represents a turning point not only for the brand losing patent protection, as bioequivalent generic versions of the drug quickly enter the market at reduced prices, but also for the non-bioequivalent drugs that retain patent protection in the same therapeutic category. In this paper, we study how physician characteristics and prescribing decisions impact competition among molecules of a therapeutic class once generic versions of one of these molecules enter the market. Our results show that the traditional focus on the single molecule losing patent protection is not sufficient to understand the impact of generics in the category and their cost-saving potential. We find that generic entry in the category under analysis not only leads to the expected decrease in the prescription of the branded molecule bioequivalent to the generics, but also unexpectedly benefits other non-bioequivalent branded drugs as detailing-sensitive physicians switched from the contested molecule to these other branded alternatives. However, a group of price-sensitive physicians did increase their use of the new generics to the detriment of all branded alternatives, allowing for additional savings in health care costs. The overall market result is a slight decrease in the prescriptions of the now much cheaper molecule. This paradox was identified previously in several pharmaceutical categories [Caves, R.E. Whinston, M.D. & Hurwitz, M.A. (1992), “Patent expiration, entry and competition in the US pharmaceutical industry: an exploratory analysis”, Brookings Papers on Economic Activity, Microeconomics, vol. 1991, 1–48.], but lacked a systematic understanding and explanation. We show that the understanding of such market paradoxes requires marketers and policy makers to (1) determine the size of physician segments sensitive to marketing activity and prices, and (2) assess the marketing activity of all pharmaceutical firms, whether bioequivalent or not. We discuss the managerial and policy implications of our results.

Publications by year

2016

Abstract:Forecasting Branded and Generic Pharmaceuticals

We forecast UK pharmaceutical time series before and after the time of patent expiry. This is a critical point in the respective lifecycle as a generic form of the product is introduced to the market, while the branded form is still available for prescription. Forecasting the number of dispensed units of branded and generic forms of pharmaceuticals is increasingly important due to their huge market value and the limited number of new ‘blockbuster’ branded drugs, as well as the imposed cost to national healthcare systems like the NHS. In this paper, eleven methods are used to forecast drug time series including Diffusion Models (Bass model & RPDM), ARIMA, Exponential smoothing (Simple and Holt), naive and regression methods. ARIMA and Holt produce accurate short term (annual) forecasts for branded and generic drugs respectively, while for the more strategic horizons of 2-5 year ahead, Naive with drift provides the most accurate forecasts.

Abstract:Modelling the effects of promotional efforts on aggregate pharmaceutical demand: what we know and challenges for the future.

Abstract:The Relationship Between Household Life Cycle and Brand Loyalty

This research investigates changes in brand loyalty as households pass from one stage of the household life cycle to another. Analysing 45 brands in three consumer product categories in the UK, we find that the changes follow a U shape pattern. Brand loyalty declines as households shift from the young single stage to the young couple and the young family stage, remains relatively lower through the older family stage, and then increases at the post family and older single stages.

It is increasingly recognized that progress can be made in the development of integrated theory for understanding, explaining and better predicting key aspects of buyer–seller relationships and industrial networks by drawing upon non-traditional research perspectives and domains. One such non-traditional research perspective is stochastic modeling which has shown that large scale regularities emerge from the individual interactions between idiosyncratic actors. When these macroscopic patterns repeat across a wide range of firms, industries and business types this commonality suggests directions for further research which we pursue through a differentiated replication of the Dirichlet stochastic model. We demonstrate predictable behavioral patterns of purchase and loyalty in two distinct industrial markets for components used in critical surgical procedures. This differentiated replication supports the argument for the use of stochastic modeling techniques in industrial marketing management, not only as a management tool but also as a lens to inform and focus research towards integrated theories of the evolution of market structure and network relationships.

2012

McCabe J, Dacko S, Stern PP (2012). Before and after: using the Dirichlet to analyze the sales impact of a sustained increase in promotional activity in an organizational market. Journal of Advertising Research, 52(2), 214-224. DOI.

2008

Abstract:Can branded drugs benefit from generic entry? the role of detailing and price in switching to non-bioequivalent molecules

Patent expiration represents a turning point not only for the brand losing patent protection, as bioequivalent generic versions of the drug quickly enter the market at reduced prices, but also for the non-bioequivalent drugs that retain patent protection in the same therapeutic category. In this paper, we study how physician characteristics and prescribing decisions impact competition among molecules of a therapeutic class once generic versions of one of these molecules enter the market. Our results show that the traditional focus on the single molecule losing patent protection is not sufficient to understand the impact of generics in the category and their cost-saving potential. We find that generic entry in the category under analysis not only leads to the expected decrease in the prescription of the branded molecule bioequivalent to the generics, but also unexpectedly benefits other non-bioequivalent branded drugs as detailing-sensitive physicians switched from the contested molecule to these other branded alternatives. However, a group of price-sensitive physicians did increase their use of the new generics to the detriment of all branded alternatives, allowing for additional savings in health care costs. The overall market result is a slight decrease in the prescriptions of the now much cheaper molecule. This paradox was identified previously in several pharmaceutical categories [Caves, R.E. Whinston, M.D. & Hurwitz, M.A. (1992), “Patent expiration, entry and competition in the US pharmaceutical industry: an exploratory analysis”, Brookings Papers on Economic Activity, Microeconomics, vol. 1991, 1–48.], but lacked a systematic understanding and explanation. We show that the understanding of such market paradoxes requires marketers and policy makers to (1) determine the size of physician segments sensitive to marketing activity and prices, and (2) assess the marketing activity of all pharmaceutical firms, whether bioequivalent or not. We discuss the managerial and policy implications of our results.